The Value of Design in Retail and Branding

Katelijn Quartier, Ann Petermans, T. C. Melewar, Charles Dennis

• Publisher: Emerald Publishing Limited
• Year: 2021
• ISBN:
  9781800715813
• Topic: Business
• Subtopic: Marketing
• Index: Business

Scholarly studies of value creation for consumer experience constitute a very fragmented field, spanning the disciplines of design, branding and marketing. The Value of Design in Retail and Branding creates a much-needed bridge between different disciplines involved in retail design, bringing together a range of research and insights for practice in these disciplines, improving the impact of design.
Here Katelijn Quartier, Ann Petermans, TC Melewar and Charles Dennis bring together a team of field-leading, practice-based experts in order to offer an interdisciplinary, practice-oriented inquiry into how design plays a key role in defining a successful retail environment and experience. In four sections organised around the concepts of design, experience, context, and interdisciplinarity, contributors highlight how to achieve impactful branding and retail-experience design through a focus on such issues as local relevance and storytelling. As each chapter concludes by explaining how its findings can feed into practice, this book begins filling the gap between academic journals and visual case studies, ultimately providing fertile ground for further debate around best practice.
For its interdisciplinary approach, its scholarly rigour, and its clearly articulated implications for practice, The Value of Design in Retail and Branding is of interest to scholars of design, branding and marketing as well as to practitioners within these fields.

Part 1
The Value of…Design

Chapter 1

Conceptualising Customer Value in Physical Retail: A Marketing Perspective

Sara Leroi-Werelds

There is only one boss. The customer. And he can fire everybody in the company from the chairman on down, simply by spending his money somewhere else.

–Sam Walton, founder of Walmart [1]

This quote nicely shows the link between a store's value for the customer and value for the retailer. Put simply, if there is no value for the customer, there is no value for the retailer. For this reason, customer value has been recognised as one of the most fundamental concepts in marketing academia as well as practice [2,3]. Specifically, it has been widely accepted that customer value is a key source of competitive advantage [4] and exists at the heart of business strategy since ‘the creation of customer value must be the reason for the firm's existence and certainly for its success’ [5, p. 166].

The aim of this chapter is to enhance our understanding of customer value in physical retail by describing its relevance and conceptualisation. This chapter first explains why customer value is so important for physical retail before, during, and after the customer's store visit. Next, customer value is conceptualised based on five key characteristics: (1) customer value implies an interaction between the customer and the store; (2) customer value involves a trade-off between the benefits and costs of the store; (3) customer value is multidimensional and includes 25 potential value types; (4) customer value is personal and; (5) customer value depends on the context. After a brief conclusion, this chapter ends with some key takeaways for practitioners.

The Relevance of Customer Value

For physical retail, customer value is crucial before, during and after the customer's store visit (see Fig. 1.1). In the pre-visit phase, the value proposition plays a critical role. The value proposition can be considered as an invitation from the retailer to the customer and is based on promises about the potential value of the store. The customer can decide whether to accept (i.e. visit the store) or decline (i.e. not visit the store) this invitation [6]. For instance, the value proposition of Amazon Go is based on convenience: ‘no lines, no checkout’.

Fig. 1.1. Value Proposition and Value Perceptions.

During and after the store visit, the customer perceives, determines and evaluates the value of the store. During the store visit, these value perceptions affect whether the customer will buy from the store. For instance, if the customer likes the store's design, service, and assortment, chances are that he/she will buy something from the store. If, on the other hand, the customer believes the store's prices are too high and the staff is unfriendly, it is rather unlikely that he/she will buy from the store. Finally, after the store visit, these value perceptions influence key outcomes such as customer satisfaction, loyalty, and word-of-mouth [7,8].

The Conceptualisation of Customer Value

Based on recent conceptual work on customer value [9], we can discern five key characteristics of customer value that are relevant for retail: (1) customer value implies an interaction between the customer and the store; (2) customer value involves a trade-off between the benefits and costs of the store; (3) customer value is multidimensional; (4) customer value is personal and; (5) customer value depends on the context. In the following sections, I explain these characteristics one by one.

Customer Value Implies an Interaction between the Customer and the Store

‘If a tree falls in the forest and there's nobody around to hear it, does it make a sound?’ This is a well-known philosophical question that focuses on the difference between observation and perception. In a similar vein, we can ask ourselves ‘If a store is closed and no customer is able to visit it, does it have value for the customer?’. From a marketing point of view, the answer is ‘no’. Customer value is not embedded in the store, but in the customer's experience derived from the store. Hence, the customer has to interact with the store (including different store elements such as employees, technologies, and design) to create value. If a customer doesn't visit the store, the store can only have potential value for the customer, but no real value. When visiting the store and interacting with its design, technologies, and employees, the potential value of the store is transformed into real value or value-in-use [9].

Customer Value Involves a Trade-off between the Benefits and Costs of the Store

One of the most often cited and used definitions of customer value is the one put forward by Zeithaml [3, p. 14] defining it as ‘the consumer's overall assessment of the utility of a product based on perceptions of what is received and what is given’. Hence, customer value involves a cost-benefit analysis made by the customer. Throughout the years, several authors [2,3,4] have highlighted that customer value includes a trade-off between positive and negative value types. The positive value types involve the benefits of visiting a store, such as status, product excellence, and enjoyment. The negative value types include the costs of visiting a store, such as price, effort, and physical risks.

Customer Value Is Multidimensional

There is a general consensus that customer value consists of multiple value types [2]. For many years, Holbrook's value typology [10,11] has been used to examine customer value [12]. However, based on advances in academia and business practice, this value typology has recently been updated [13]. Based on this update, 25 potential value types (see Fig. 1.2) can be discerned in physical retail: 15 positive (i.e. benefits) and 10 negative value types (i.e. costs). The following sections provide a description of each of these value types.

Fig. 1.2. Customer Value Typology.

Convenience

Convenience relates to making the life of the customer easier. The impact of technologies on customers' convenience expectations is overwhelming [14,15]. Customers are now used to watching a movie in a few clicks (i.e. Netflix); listening to their favourite music when and wherever they want (i.e. Spotify); and making payments in just a few seconds (i.e. mobile banking). As a result, customers expect more and more convenience, also from retailers. Customers want ‘frictionless’ customer experiences [16] and offering convenience has become crucial for many retailers to be competitive [14,17]. Amazon Go, for instance, offers an extreme level of convenience based on so-called ‘just walk out technology’: Customers just walk into the store, take what they want, and walk out.

Product Excellence and Service Excellence

Excellence involves the quality of the store, which includes both product and service quality since ‘retailing is not just about offering products for sale, but a complex product/service proposition’ [18, p. 5]. Product excellence relates to the quality and variety of the assortment, while service excellence is mainly related to store employees including their friendliness, responsiveness, and expertise [19]. However, service excellence can also be related to the quality of the services provided by in-store technologies, such as an in-store kiosk or an in-store app [20].

Self-Esteem

Self-esteem is related to the customer's satisfaction with oneself. Customers choose stores, not only for what they can do, but also for what they mean [21]. Specifically, customers opt for stores that possess a retail patron image (i.e. the stereotypic image of the typical customers or patrons of a store) that matches their self-concept [22]. This match between self-concept and retail patron image is termed ‘self-image congruence’ or ‘self-congruity’ [22]. Store patronage thus allows customers to define, support, and improve their self-concept [21].

The literature [21,22] identifies four types of self-concept:

(1)actual self: how a customer sees him/herself;

(2)ideal self: how a customer would like to see him/herself;

(3)actual social self: how a customer thinks others see him/her;

(4)ideal social self: how a customer would like to be seen by others.

Actual and ideal self involve the private self and are related to the value type ‘self-esteem’. Since there can be a discrepancy between the actual and ideal self, the ideal self motivates patronage behaviour through the need for self-esteem. ‘People have ideal images of themselves and realizing these images (through patronizing stores and retail outlets that are associated with them) boosts their self-esteem’ [22, p. 131]. Actual social and ideal social self are related to the public self and thus linked to the next value type: status.

Status

Status is related to the actual social and ideal social self-concept discussed in the previous section. It refers to the public self and involves making a positive impression on others. It is thus related to impression management and conspicuous consumption [22]. ‘People are motivated to do things that would cause others to think highly of them’ [22, p. 132]. Just as drinking Veuve Clicquot, driving Tesla or wearing Armani can impact how others see you, so too can shopping at Rituals, Bioplanet or Zara [23]. Hence, customers opt for particular stores to gain positive reactions and social approval of others [22].

Enjoyment

Enjoyment denotes the degree to which the customer has fun and pleasure when visiting a store [24]. Customers increasingly engage in shopping for hedonic purposes, since shopping has become ‘a crucial, easily accessible, and socially approved leisure and lifestyle activity’ [25, p. 300]. Hence, retailers can take the entertainment aspect of retailing, or ‘entertailing’ [26], into account when designing the store. For instance, JBC – a Belgian fashion retailer targeting families with kids – opened its first JBC K'dee store in Spring 2020. This store is designed by and for children. JBC collaborated with a primary school to co-design the store and the children mentioned that their prior store experiences were boring and not enjoyable. As a result, the K'dee store is designed to be fun. It even includes a tree house and a playground with a slide.

Aesthetics

Aesthetics are related to the design of the store environment and include the customer's perceptions about the aesthetic design as well as ambient elements of the store. Aesthetic design elements exist at ‘the forefront of our awareness’ and include colours, styles, pictures and graphics used by the store, while ambient elements exist as background conditions and include elements such as lighting, music, temperature, sounds and smells [27]. Retailers and retail designers can use these design elements wisely to convey a message about the retail brand while taking the aesthetic preferences of target customers into account [28]. Prior research shows that these design elements impact customers' store experiences and evaluations [27,28,29].

Escapism

Escapism refers to relaxation during the shopping trip to escape reality and daily routine. It involves the notion that shopping can reduce stress and can even help get one's mind of a problem [25]. Some researchers even note that shopping can be a form of therapy for customers [24].

Personalisation

Personalisation refers to the adaptation of the shopping experience to the customer's individual preferences. In the past, personalisation was mostly related to employee behaviour, such as using the customer's name, recalling...